Despite Pandemic Mortgage Relief, Homeowners Are Still Losing Their Homes
The CARES Act is also known as mortgage relief was established to help homeowners who can’t make monthly payments. This is due to the national coronavirus emergency. The government has listed a variety of options to help If you can’t make your mortgage payments because of the coronavirus. Start by understanding your options and reaching out for assistance.
On the bright side, investors are still buying homes, the COVID-19 pandemic caused a spike in home buying.
Foreclosed Homes
When you are buying a foreclosure at an auction, it means you may be buying the property unseen, and you have no idea what jobs you are faced with after you finalize the purchase. The repairs could be extensive and more than what you were prepared for.
Different Options
As many are not aware, there is a difference between the two. A REALTOR® is a member of the National Association of REALTORS®. A REALTOR® can be a real estate agent, a broker-associate, a managing broker, an exclusive buyer’s agent, amongst other common terms. The Code of Ethics is enforced for REALTORS® and they must comply with all fair practices and be honest. A Realtor must also pledge to put their clients’ interests above their own.
Pre-Approval for a Mortgage
Pre-approval means the lender is confident you have enough for a down payment. Income that can sufficiently cover mortgage payments. The lender also needs to make sure the property’s value is in correlation with the loan amount. The home must be appraised for an amount either equal to or more than the purchase price. And to prove that you’re serious about buying says, Jensen. “Right before or after you meet with the agent, meet with the lender.”
The first step is to check your credit reports and credit score. This way you can have a clearer idea of what type of loan you will be approved for.
Who Qualifies for Mortgage Pre-Approval
• Income: Prepare to supply the loan representative with the previous two years of employment documents. Including pay stubs, tax returns, and W-2s. Also show any additional source of income, such as a second job, overtime, commissions and bonuses, interest and dividend income, Social Security payments, VA and retirement benefits, alimony, or child support).
• Assets: Your lender will need to see information about assets you have, other than income. This can include bank account statements or information on investments you have made. When a friend gives you money, be sure to bring a gift letter. This will show the money is not a loan.
• Personal information: A driver’s license, or a passport, and your Social Security Number for a credit check are required. The lender will pull your credit reports, so you will not need to bring this information with you.
A pre-approval will take typically anywhere from 2 weeks to a month. Though, automated underwriters can sometimes be completed within a day or even an hour. You can also attempt to get pre-approved from multiple institutions within 45 days. Lenders will know that you are looking to purchase a home
Lower Prices
It is best to offer based on how long the home has been sitting on the market; when the properties in that area are moving swiftly and just came on the market “you come in at your highest and best” Jensen explains. But when “the property has been sitting on the market forever and there is no activity” you can come in at a lower price. Jensen explains to “look at the comps in today’s current market conditions and write a competitive offer based on that.” Get an inspection; an inspection is recommended to determine the issues the property may have.
Though, keep in mind that foreclosures are sold as-is, so do not expect a discount to compensate for miscellaneous repairs. When you are figuring out the costs of the property and determining your budget for repairs. It is important to note that there are risks involved when purchasing a foreclosure, and it is better to prepare in advance financially for any of those ‘hidden surprises’ behind the walls.
Risks Involved
At often times, people do not see the potential risks involved when it comes to facing foreclosure because they are looking to find a better deal and the new homeowners face difficulties of unforeseen events. Maintenance and condition of the property can turn into various projects based on the circumstances of whether previous owners recently moved out, and the time-frame the house was unoccupied, some concerns include:
• Lack of cleanliness- bank-owned properties can be disgustingly dirty. Especially from the time frame of sitting empty or the negligence of previous owners. Built-up dirt over time will even at times cause the entire home to smell.
• Bad renovations from previous homeowners that made changes without proper permits. Such as the garage being turned into a living space, will be undesirable changes for future owners to work with. And the partially finished bathrooms and repairs that were done by themselves or unlicensed professionals. Where the work was done incorrectly can become a real headache.
• Water damage causing mold problems are also big issues that end up costing you a pretty penny and at often times are overlooked.
• Mechanical, water-heating, and electrical after a long time of the property sitting, the humidity and debris can cause heat exchangers to corrode and must be replaced altogether. Barnett explains this can cost anywhere from $3,000-$5,000, depending on the system you’ll need.